Annex A

Revised Specialised / Tertiary Service List for Data Collection

Cardiology - general Cardiology - complex and interventional Dermatology Endocrinology Gastroenterology Human Genetics Hepatology Infectious Disease (not TB) Lipidology Nephrology (Renal Dialysis) Neurology Pharmacology Respiratory Medicine Rheumatology Clinical Immunology Intensive Care Clinical Haematology Clinical Haematology (Bone Marrow transplant) Burns Unit Cardiothoracic Cardiothoracic Surgery (Heart transplantation) Colorectal Surgery Craniofacial Surgery ENT - general

ENT - complex Hepatobiliary surgery Intensive Care (surgical) Liver transplant Renal transplant Neurosurgery Opthalmology - general Opthalmology - complex Orthopaedics - general Orthopaedics - complex Plastic & Reconstructive Surgery Urology - complex Specialised Paediatric surgery Specialised Neonatal surgery Neonatal ICU Tertiary Diagnostic Radiology ( MRI & CT Scan) Nuclear Medicine Radiation Oncology Medical Oncology Oncological Surgery Tertiary Psychiatry Tertiary Obs & Gynae Vascular surgery Spinal injury management centre

Annex B

Cost Model – Detailed Description of Methods

General

At present, cost centre accounting systems capable of generating unit costs by specialty or department are effectively available at only two major hospitals, Groote Schuur and Kimberley. Other hospitals are making progress towards the development of cost centre accounting systems, but are still some way from generating data which could have been used to support an exercise such as the review of highly specialised services (HSS). During 1998 and 1999, however, Price Waterhouse Coopers had conducted a major costing study in nine of the central hospitals (Red Cross Children’s Hospital was omitted from their study). Their study had been designed to provide a basis for a standardised cost centre accounting system, but for various reasons was not followed up following the delivery of their results.

Having reviewed the data which were available to us to conduct an adequate costing of HSS, it became clear that the review team had two practical options available by which to estimate the full costs of HSS provision – either to conduct a specific step-down costing of some or all relevant hospitals, or to use the data collected by Price Waterhouse Coopers. After considerable discussion and testing of data, it was decided to use the PWC results as the primary basis for the costing of HSS, as:

• The choice of cost centres used by PWC conformed reasonably well with the specialties required for HSS analysis
• The team was reluctant to repeat an almost identical data collection exercise to that undertaken PWC less than two years after the original work took place
• Given the resources available to the HSS team, undertaking a new data collection exercise to generate step-down costs would have been impractical in the timescale available

Methods

Data outputs from the PWC exercise were available to the review team in CD-ROM format. The primary source used was the "Level 2 Cost Allocation" for each hospital. This assigned direct costs to each cost centre in the list in terms of staff, actual use of medicines, consumables, supplies, services etc., the estimation of which was the primary purpose of the original PWC study. The PWC analysis largely stopped at this point, and critically did not attempt to allocate overhead costs (into which category the majority of the cost centres listed below fall) to clinical end user cost centres.

Table B-1: PWC Cost Centres

Administration & Finance	Central Processing Unit	Prof allied to medicine	Dietetics
	Management & Finance		Logopaedics/Speech Therapy
	Hospital Fees		Occupational Therapy
	Nursing Administration		Physiotherapy
	Patient Administration		Social Work
	Registry		Radiography
	Telephone		Orthotics/Prosthetics
	Medical records		Optometry
	Materials Handling		Podiatry
	Human Resources	Medicine	Cardiology
	Nursing Education		Community Health
	Catering		Dermatology
	Environmental Health Services		Emergency Unit
	(Cleaning)		Endocrine & Diabetes
	Transport		General Medicine
	Portering		GIT Clinic
	Security & Parking		Liver Clinic
	Other		Neurology
			Renal Unit
			Respiratory Clinic
Clinical Support	Anaesthetics		Nephrology
	Anatomy & Cell Biology		Gastroenterology
	Clinical Pharmacology		TB/HIV
	Medical Biochemistry		Rheumatology
	Pharmacy		Medical Oncology
	Physiology		Clinical Haematology
	AIDS counselling		Clinical Immunology
	Medical assistive devices		Other medicine
	Infection control	Surgical	Cardio Thoracic Surgery
	Pain centre		General Surgery
	Spinal unit		Neurosurgery
	Burns unit		Ophthalmology
	Community nursing		Orthopaedics
Technology	Biomedical Engineering		Otolaryngology
	Clinical Engineering		Plastic, Reconstr, & Maxi facial
	Hospital Engineering		Trauma Unit
	Medical Graphics		Urology
	Medical Informatics		Maxillo-facial
	Clinical Photography		Other surgery
	Orthopaedic workshop	Radiation Medicine	Medical Physics
	Medical Equipment workshop		Nuclear Medicine
Other services	Lecturing & Research		Radiology / Radiotherapy
	Creche		Radiation Oncology
	Other expenses		School of Radiography
	Other hospitals	Pathology	Anatomical
	Community Health		Chemical
	Nursing School		Haematology
Other Services cont’d		Pathology cont’d
	MOUs		Medical Microbiology
	Mortuary		Immunology
	Residences		Virology
	Central Sterilisation services		Forensic medicine
	Security services		SAIMR
	Staff sick parade	Obs, Gynae & Neonatal	Gynaecology
	Disaster preparedness		Neonatology
	Laundry		Obstetrics
			Mothers lodge
		Paediatrics	Paediatrics
		Psychiatry	Psychiatry

In order to provide a full step-down analysis which allocates the full costs of providing tertiary hospital services (i.e. including management, hotel services, maintenance, technology, pathology etc.), the review team developed a step-down allocation methodology, based upon routine specialty-level activity statistics (admissions, bed days, OP visits and number of surgical procedures) collected from each of the nine hospitals included in the PWC study. Lack of specialty level activity data meant that cost centre analysis of Ga Rankuwa Hospital was not possible. This allowed the following cost-allocation method to be employed to allocate overheads and joint costs to end-user departments in the remaining eight hospitals (precise details are most easily followed by inspecting one of the hospital worksheets (e.g. JHBcostcent_0102.xls) included in the folder /Hospital Summaries/Cost Model):

Step 1:

Allocate all management and administration cost centres to all other cost centres by % total expenditure

Step 2:

Allocate clinical support services to end-users on the basis of % bed days (catering and laundry), % surgical procedures (anaesthetics), % PDEs (pharmacy fixed costs, infection control)

Step 3:

Allocate technology support services to end-users on basis of % PDEs (medical physics split 20% nuclear medicine, 40% diagnostic radiology, 40% radiation oncology)

Step 4:

Allocate therapy services to end-users on basis of % PDEs

Step 5:

Allocate pathology and radiography services to end-users on basis of % PDEs

This exercise leads to a complete allocation of costs to clinical end-user specialties, which were then combined with activity statistics to provide unit costs per specialty. Costs are allocated between inpatient and outpatient care on a PDE basis (i.e. one outpatient visit = 0.3 bed days).

The whole step-down analysis was completed twice – once including all costs, and once excluding the direct staff costs of the end-user specialties. This latter analysis allows the step-down costing to be combined with the direct estimates of staff costs generated by the HSS data collection, giving a more up-to-date analysis, which is used as the basis for the ultimate cost model.

Finally, data for certain very highly specialised services were supplemented with data collected at Groote Schuur Hospital. At GSH, data were collected for a sample of individual patients in HSS specialties to identify length of stay, cost of inpatient drugs prescribed and cost of outpatient drugs prescribed. This additional data were synthesised with the PWC specialty costs to allow a greater degree of discrimination than specialty costs alone allow, e.g. to discriminate between heart transplant patients and other cardiothoracic surgery patients.

These outputs for each hospital were then combined to generate average unit costs across hospitals (trimmed for outlier values), allowing a standardised unit cost estimate to be applied to the HSS data.

Table B-2 summarises full average specialty costs, and Table B-3 summarises average unit costs excluding direct staff costs. The outputs of Table B-3 are then related to HSS unit definitions, and the patient sample data from GSH are combined to provide the HSS unit costs (Table B-4) used in every hospital summary in the "Cost Outputs" sheet, where they are combined with HSS staff costs and HSS activity estimates to generate estimated total HSS unit cost. The costs used in Table B-4 are downscaled to 60% in order to proxy lower costs at regional hospitals, where NHA results indicated costs per PDE are 60% of cost per PDE in central hospitals. Exceptions are made for a number of HSS in which costs are unlikely to differ by level of hospital (e.g. complex cardiology, spinal injuries etc.) Table B-5 shows unit costs as used for regional hospitals. All costs have been uplifted to 2001 prices.

Table B-2: Full unit costs per specialty – national average values

Specialty / Unit	Admission	PDE	OP Visit
Cardiology	13,737	2,370	711
Critical Care / ICU	24,320	4,153
Dermatology	12,803	1,195	358
Emergency Unit(Casualties)	4,483	1,268	326
Endocrine & Diabetes	8,097	1,070	321
General Medicine	5,511	814	244
GIT Clinic	5,724	910	258
Liver Clinic	17,221	1,982	0
Neurology	11,091	1,423	466
Renal Unit / Nephrology	18,054	2,524	685
Respiratory Clinic	31,809	2,255	584
TB/HIV	1,646	225	0
Clinical Haematology	10,185	833	293
Oncology	18,506	1,706	512
Other medical	1,629	222	0
Cardiothoracic	34,371	2,291	687
General Surgery (incl. Burns unit)	10,982	1,345	404
Neurosurgery	16,530	1,363	409
Ophthalmology	5,137	1,288	374
Orthopaedics (inc. spinal unit)	11,264	1,115	341
Otolaryngology	6,787	971	291
Plastic, Reconstr, & Maxi facial	6,888	1,374	412
Trauma Unit	13,820	1,979	545
Urology	8,445	1,486	405
Maxillo facial	6,616	1,363	409
Nuclear Medicine	0	0	791
Radiation Oncology	16,919	1,213	364
Gynaecology	6,133	1,078	323
Neonatology	15,683	1,065	0
Obstetrics	4,788	1,050	315
Paediatrics	7,724	913	274
Psychiatry	13,274	929	279

Table B-3: Unit costs per specialty excluding direct staff costs national average values

Specialty / Unit	Admission	PDE	OP Visit
Cardiology	8,467	1,412	424
Critical Care / ICU	11,210	1,047
Dermatology	8,009	665	200
Emergency Unit(Casualties)	2,449	693	206
Endocrine & Diabetes	5,362	698	209
General Medicine	2,897	429	129
GIT Clinic	5,179	812	79
Liver Clinic	10,166	1,170	0
Neurology	4,475	571	171
Renal Unit / Nephrology	13,714	1,867	527
Respiratory Clinic	16,186	1,169	246
TB/HIV	1,524	208	0
Clinical Haematology	10,372	807	223
Oncology	12,142	1,089	123
Other medical	1,504	205	0
Cardiothoracic	23,660	1,585	475
General Surgery (incl. Burns unit)	6,279	762	229
Neurosurgery	9,276	726	218
Ophthalmology	3,741	571	239
Orthopaedics (inc. spinal unit)	6,985	678	203
Otolaryngology	3,766	537	161
Plastic, Reconstr, & Maxi facial	3,823	732	219
Trauma Unit	9,999	1,381	374
Urology	4,463	714	214
Maxillo facial	4,952	992	298
Nuclear Medicine	0	0	100
Radiation Oncology	6,925	510	140
Gynaecology	3,410	594	178
Neonatology	7,700	456	0
Obstetrics	2,308	441	141
Paediatrics	3,751	436	145
Psychiatry	5,023	388	116

Table B-4: Integrated Cost Outputs for Cost Model - Central Hospitals

Name / Description of HSS	Admission	PDE	OP Visit
Cardiology	8,467	1,142	424
Cardiology (Complex)	25,216	1,727	641
Dermatology	8,009	665	200
Endocrinology	5,362	698	209
Gastroenterology	5,179	812	79
Human Genetics	2,897	429	129
Hepatology	10,166	1,170	527
Lipidology	2,897	429	129
Nephrology (Renal Dialysis)	13,714	1,867	527
Neurology	4,475	571	171
Pharmacology	0	0	0
Respiratory Medicine	16,186	1,169	246
Rheumatology	2,897	429	129
Clinical Immunology	2,897	429	129
Intensive Care	11,210	1,047	0
Clinical Haematology	10,372	807	223
Clin Haem (Bone Marrow transplant)	22,936	917	580
Burns Unit	6,279	762	229
Cardiothoracic	23,660	1,585	475
Cardiothoracic (Heart transplant)	29,925	2,067	2,390
Colorectal Surgery	6,279	762	229
Craniofacial Surgery	4,952	992	298
ENT	3,766	537	161
ENT (cochlear implantation)	125,403	768	204
Hepatobiliary surgery	10,166	1,170	527
Intensive Care (surgical)	11,210	1,047	0
Liver transplant	98,408	1,937	527
Renal transplant	96,711	1,867	527
Neurosurgery	9,276	726	218
Opthalmology	3,741	571	239
Opthalmology (complex)	5,006	705	486
Orthopaedics	6,985	678	203
Orthopaedics (complex)	10,644	840	242
Plastic & Reconstructive Surgery	3,823	732	219
Urology	4,463	714	214
Specialised Paediatric surgery	17,201	1,030	309
Specialised Neonatal surgery	17,201	1,030	309
Neonatal ICU	7,700	456	0
MRI & CT Scan	177	177	177
Nuclear Medicine	526		339
Radiation Oncology	6,925	510	263
Medical Oncology	12,142	1,089	123
Oncological Surgery	8,766	1,030	309
Tertiary Psychiatry	5,023	388	116
Tertiary Obs & Gynae	3,410	594	319
Vascular Surgery	10,397	794	229
Spinal injury management centre	76,614	678	203

Table B-5: Integrated Cost Outputs for Cost Model - Regional Hospitals

Name / Description of HSS	Admission	PDE	OP Visit
Cardiology	5,080	685	254
Cardiology (Complex)	25,216	1,727	641
Dermatology	4,805	399	120
Endocrinology	3,217	419	125
Gastroenterology	3,107	487	47
Human Genetics	1,738	257	77
Hepatology	6,100	702	316
Lipidology	1,738	257	77
Nephrology (Renal Dialysis)	8,228	1,120	316
Neurology	2,685	343	103
Pharmacology	0	0	0
Respiratory Medicine	9,712	701	148
Rheumatology	1,738	257	77
Clinical Immunology	1,738	257	77
Intensive Care	6,726	628	0
Clinical Haematology	10,372	807	223
Clin Haem (Bone Marrow transplant)	22,936	917	580
Burns Unit	3,767	457	137
Cardiothoracic	23,660	1,585	475
Cardiothoracic (Heart transplant)	29,925	2,067	2,390
Colorectal Surgery	3,767	457	137
Craniofacial Surgery	2,971	595	179
ENT	2,260	322	97
ENT (cochlear implantation)	125,403	768	204
Hepatobiliary surgery	6,100	702	316
Intensive Care (surgical)	6,726	628	0
Liver transplant	98,408	1,937	527
Renal transplant	96,711	1,867	527
Neurosurgery	5,566	436	131
Opthalmology	2,245	343	143
Opthalmology (complex)	3,003	423	291
Orthopaedics	4,191	407	122
Orthopaedics (complex)	6,386	504	145
Plastic & Reconstructive Surgery	2,294	439	131
Urology	2,678	428	128
Specialised Paediatric surgery	10,321	618	185
Specialised Neonatal surgery	10,321	618	185
Neonatal ICU	4,620	274	0
MRI & CT Scan	106	106	106
Nuclear Medicine	316	0	204
Radiation Oncology	6,925	510	263
Medical Oncology	7,285	653	74
Oncological Surgery	5,260	618	185
Tertiary Psychiatry	3,014	233	70
Tertiary Obs & Gynae	2,046	356	191
Vascular Surgery	6,238	476	137
Spinal injury management centre	76,614	678	203

Annex C – National Tertiary Care Activity

Service:	Admissions	Day Cases	OP Visits
Cardiology - general	9,131	0	61,996
Cardiology - complex and interventional	16,719	1,109	46,442
Dermatology	3,937	12,697	75,887
Endocrinology	9,781	652	90,115
Gastroenterology	18,832	8,188	64,968
Human Genetics	1,143	762	4,731
Hepatology	681	10	2,534
Infectious Disease (not TB)	424	0	3,744
Lipidology	60	600	1,600
Nephrology (Renal Dialysis)	6,164	5,344	70,450
Neurology	6,496	1,123	39,834
Respiratory Medicine	6,587	3,443	39,033
Rheumatology	381	0	9,024
Clinical Immunology	0	0	10,871
Intensive Care	14,845	27,115
Clinical Haematology	2,015	909	19,832
Clinical Haematology (Bone Marrow transplant)	22	0	0
Burns Unit	12,191	1,150	28,185
Cardiothoracic	10,840	54	17,394
Cardiothoracic Surgery (Heart transplantation)	0	0	0
Craniofacial Surgery	567	54	1,065
ENT - general	9,861	1,416	63,210
ENT - complex	0	0	1,517
Hepatobiliary surgery	1,020	10	1,664
Intensive Care (surgical)	4,470	7,883
Liver transplant	52	32	300
Renal transplant	762	0	5,448
Neurosurgery	10,351	300	24,186
Opthalmology - general	17,146	2,387	159,944
Opthalmology - complex	3,722	0	78,888
Orthopaedics - general	48,326	6,947	152,735
Orthopaedics - complex	8,352	110	35,463
Plastic & Reconstructive Surgery	12,584	763	23,217
Urology - complex	15,062	1,749	61,139
Specialised Paediatric surgery	11,783	88	12,374
Specialised Neonatal surgery	9,273	30	1,923
Neonatal ICU	25,054	0
Tertiary Diagnostic Radiology ( MRI & CT Scan)	59,661	14,260	57,655
Nuclear Medicine	35,744	1,055	41,217
Radiation Oncology	2,175	0	97,767
Medical Oncology	3,298	10,019	135,527
Oncological Surgery	11,314	1,848	18,012
Tertiary Obs & Gynae	8,177	11,780	41,120
Vascular surgery	6,134	6,014	9,638
Spinal injury management centre	975	0	12,462
National Total	436,207	129,900	1,640,010
Excl. ICU bed days		94,902

(n.b. Figures in ICU "day case" column are ICU bed days, where no admissions stats are available

Annex D – Hospitals and % Activity by Patient’s Province of Origin

Eastern Cape
Inpatient Admissions	Average Percentage Patients From:
Hospital Name:	E. Cape	Free State	Gauteng	KZN	Mpu	N. Cape	N. Prov.	N. West	W. Cape	Not SA	Un- known
Umtata Hospital	98.66%	0.00%	0.00%	0.56%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.78%
Port Elizabeth hospital	100.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Frere Hospital	99.96%	0.00%	0.01%	0.01%	0.00%	0.00%	0.00%	0.00%	0.02%	0.00%	0.00%
Dora Nginza Hospital	100.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Cecilia Makiwane	99.73%	0.00%	0.00%	0.27%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Free State
Inpatient Admissions	Average Percentage Patients From:
Hospital Name:	E. Cape	Free State	Gauteng	KZN	Mpu	N. Cape	N. Prov.	N. West	W. Cape	Not SA	Un- known
Goldfields Hospital	0.00%	100.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Pelonomi Hospital	0.08%	99.92%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Universitas Hospital	1.87%	91.14%	0.85%	0.00%	0.00%	2.81%	0.55%	0.38%	0.09%	2.30%	0.00%

Gauteng
Inpatient Admissions	Average Percentage Patients From:
Hospital Name:	E. Cape	Free State	Gauteng	KZN	Mpu	N. Cape	N. Prov.	N. West	W. Cape	Not SA	Un- known
Chris Hani Baragwanath	0.15%	0.15%	95.42%	0.69%	1.31%	0.00%	1.13%	0.77%	0.00%	0.38%	0.00%
Coronation	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Ga-Rankuwa	0.00%	0.00%	57.34%	0.00%	6.95%	0.00%	12.49%	23.22%	0.00%	0.00%	0.00%
Helen Joseph	0.00%	0.00%	100.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Hillbrow	0.00%	0.00%	100.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Johannesburg	0.19%	0.19%	87.49%	0.65%	1.75%	0.19%	1.47%	1.18%	0.65%	2.35%	3.89%
Kalafong	0.00%	0.00%	90.28%	0.54%	8.04%	0.00%	0.26%	0.89%	0.00%	0.00%	0.00%
Leratong	0.00%	0.00%	100.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Pretoria	0.10%	0.26%	74.75%	3.51%	6.11%	0.08%	3.23%	2.31%	0.12%	1.07%	8.46%
Natalspruit	0.00%	0.00%	100.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%